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Exam 4: Process Costing

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Question 31

True/False

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The step-down method of cost allocation is more accurate than the direct method because the step-down method takes into account the services that service departments provide to each other.

A) True
B) False

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Question 32

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Arona Corporation manufactures canoes in two departments, Fabrication and Waterproofing. In the Fabrication Department, fiberglass panels are attached to a canoe- shaped aluminum frame. The canoes are then transferred to the Waterproofing department to be coated with sealant. Arona uses a weighted-average process cost system to collect costs in both departments.All materials in the Fabrication Department are added at the beginning of the production process. On July 1, the Fabrication Department had 30 canoes in process that were 20% complete with respect to conversion cost. On July 31, Fabrication had 20 canoes in process that were 40% complete with respect to conversion cost. During July, the Fabrication Department completed 70 canoes and transferred them to the Waterproofing Department.What journal entry should Arona make to record the completion of the production process by the Waterproofing Department?

A)
B)
C)
D)

E) All of the above
F) A) and B)

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Question 33

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Arona Corporation manufactures canoes in two departments, Fabrication and Waterproofing. In the Fabrication Department, fiberglass panels are attached to a canoe- shaped aluminum frame. The canoes are then transferred to the Waterproofing department to be coated with sealant. Arona uses a weighted-average process cost system to collect costs in both departments.All materials in the Fabrication Department are added at the beginning of the production process. On July 1, the Fabrication Department had 30 canoes in process that were 20% complete with respect to conversion cost. On July 31, Fabrication had 20 canoes in process that were 40% complete with respect to conversion cost. During July, the Fabrication Department completed 88 canoes and transferred them to the Waterproofing Department.What are the Fabrication Department's equivalent units of production related to conversion costs for July?

Esty Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were: A total of 7,700 units were started and 6,600 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: The ending inventory was 70% complete with respect to materials and 10% complete with respect to conversion costs.What are the equivalent units for conversion costs for the month in the first processing department?

In August, one of the processing departments at Tsuzuki Corporation had beginning work in process inventory of $24,000 and ending work in process inventory of $13,000. During the month, $283,000 of costs were added to production.In the department's cost reconciliation report for August, the cost of units transferred out of the department would be:

Gunes Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were: A total of 8,500 units were started and 7,400 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs.What are the equivalent units for materials for the month in the first processing department?

Haffner Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below: What are the equivalent units for materials for the month in the first processing department?

Annenbaum Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 1,800 units. The costs and percentage completion of these units in beginning inventory were: A total of 9,300 units were started and 7,300 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs.What are the equivalent units for conversion costs for the month in the first processing department?

Bistrol Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were: A total of 8,400 units were started and 7,500 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: The ending inventory was 70% complete with respect to materials and 60% complete with respect to conversion costs.The cost per equivalent unit for conversion costs for the first department for the month is closest to:

Sharp Corporation has a process costing system. The following data relate to the company's Mixing Department for a recent month: All materials are added at the beginning of the Mixing process.Required:a. Compute the equivalent units of production for materials and conversion using the weighted-average method.b. Compute the equivalent units of production for materials and conversion using the first-in, first-out method.

In June, one of the processing departments at Sorto Corporation had beginning work in process inventory of $30,000. During the month, $345,000 of costs were added to production and the cost of units transferred out from the department was $346,000. Required:Construct a cost reconciliation report for the department for the month of June.

Carrington Corporation produces canned vegetable soup. The company uses the weighted-average method in its process costing system. The company sold 300,000 units in January. Data concerning inventories follow: What were the equivalent units for conversion costs for January?

Onyemah Corporation uses the first-in, first-out method in its process costing system. Operating data for the Brazing Department for the month of November appear below: What were the equivalent units of production for conversion costs in the Brazing Department for November?

The Assembly Department started the month with 24,200 units in its beginning work in process inventory. An additional 309,200 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 29,200 units in the ending work in process inventory of the Assembly Department. How many units were transferred to the next processing department during the month?

Overboard Corporation uses the first-in, first-out method in its process costing system. In the Cutting Department in June, units were 80% complete with respect to conversion in the beginning work in process inventory and 25% complete with respect to conversion in the ending work in process inventory. Other data for the department for June follow: The cost per equivalent unit for conversion cost is closest to:

Prestwich Corporation has two service departments and two operating departments. Costs of the Building and Grounds service department are allocated to other departments on the basis of square feet of space occupied. The departments in the company and the amount of space occupied by each are presented below: Budgeted costs in the Building and Grounds department total $34,800 for the year.Assuming the step-down method is used and Building and Grounds costs are allocated first, the amount of Building and Grounds costs allocated to the Cafeteria would be:

In calculating cost per equivalent unit under the weighted-average method, prior period costs are combined with current period costs.

In July, one of the processing departments at Junkin Corporation had beginning work in process inventory of $17,000 and ending work in process inventory of $19,000. During the month, $193,000 of costs were added to production and the cost of units transferred out from the department was $191,000. Required: Construct a cost reconciliation report for the department for the month of July.

Gunes Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were: A total of 8,500 units were started and 7,400 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs.The cost of ending work in process inventory in the first processing department according to the company's cost system is closest to:

Activities in the Challenger Corporation's Assembly Department for the month of March follow: Using the weighted-average method, the equivalent units for materials for March would be: